The following discussion should be read in conjunction with our condensed
consolidated financial statements and notes to those statements and other
financial information appearing elsewhere in this Quarterly Report on Form 10-Q
and in the Company's Annual Report on Form 10-K filed on March 4, 2021 (the
"2020 Form 10-K"). In addition to historical information, the following
discussion and other parts of this Quarterly Report contain forward-looking
information that involves risks and uncertainties. SIGA's actual results could
differ materially from those anticipated by such forward-looking statements due
to a number of factors. See the factors set forth under the heading "Safe Harbor
Statement" at the end of this Item 2.
Overview
We are a commercial-stage pharmaceutical company. Our lead product,
TPOXX® ("oral TPOXX®"), is an oral formulation antiviral drug for the treatment
of human smallpox disease caused by variola virus. On July 13, 2018, the United
States Food & Drug Administration ("FDA") approved oral TPOXX® for the treatment
of smallpox.
COVID-19 Pandemic
The COVID-19 pandemic has caused significant societal and economic disruption.
Such disruption, and the associated risks and costs, are expected to continue
for an indeterminate period of time. Given the uncertain future course of the
COVID-19 pandemic, and the uncertain scale and scope of its future direct and
indirect impact, the Company is continually reviewing business and financial
risks related to the pandemic and seeking coordination with its government
partners with respect to the performance of current and future government
contracts. Additionally, the Company is continually coordinating with service
providers and vendors, in particular Contract Manufacturing Organizations that
constitute our supply chain, with respect to actions and risks caused by the
COVID-19 pandemic.
As of the filing date of this document, the Company has not identified or been
notified by government customers of impediments to the continued full
performance of their government contracts. Additionally, the Company's supply
chain for the manufacture of TPOXX® has remained operational on current projects
without material COVID-19 related disruption, and in the ordinary course of
operations, the supply chain has secured, or is in the process of securing,
sufficient raw materials and supplies to support manufacture and product
delivery activities on current projects. With regard to day-to-day operations,
the COVID-19 pandemic, and the secondary effects of the pandemic, have at times
slowed the daily pace of execution of government contracts as well as new
contract generation. For example, U.S. and foreign government staffs overseeing
health security preparedness have been involved directly or indirectly in
governmental responses to the pandemic, which has diverted government staff time
that would normally be directed toward contract matters involving SIGA. The
Company expects to experience delays, or slower-than-usual pace, in connection
with certain research and development activities, such as those that involve
clinical trials. The Company does not currently expect any pandemic-related
delays in research and development activities to have a material adverse impact
on the financial condition or annual financial results of the Company, or its
long-term performance, but cannot give assurances as to the full extent of the
impact at this time.
Overall, the COVID-19 pandemic has not adversely affected the liquidity position
of the Company, nor is it currently expected to have a material adverse effect
on the financial condition of the Company. Given that the pandemic has diverted
foreign government staff time normally directed toward contract matters
involving SIGA, the COVID-19 pandemic has and could continue to affect the
timing of international contract awards for oral TPOXX®. Additionally, the
pandemic could result in a slower pace of product deliveries if the pandemic
results in shortages or delays in the receipt by the supply chain of raw
materials or supplies. Furthermore, Executive Order 14042 by the President of
the United States, which subjects federal prime contractors and subcontractors
to certain vaccination requirements and other COVID-19 related safety measures,
could have a material impact on the availability and/or timing of services
provided to SIGA by certain vendors for supply chain activities and research and
development activities. Otherwise, the pandemic is not currently expected to
have a material adverse effect on the 2021 financial results of the Company. The
pandemic has resulted in almost all of our employees working from home; however,
the shift in location for employees has not had a material adverse impact on the
day-to-day operations of the Company. If the general negative effect of the
COVID-19 pandemic becomes more acute or is prolonged, including due to
resurgences in infections or lack of vaccination, there could be potential risks
to our business and cash flows.
Lead Product-TPOXX®
19C BARDA Contract
On September 10, 2018, the Company entered into a contract with the U.S.
Biomedical Advanced Research and Development Authority ("BARDA") pursuant to
which SIGA agreed to deliver up to 1,488,000 courses of oral TPOXX® to the U.S.
Strategic National Stockpile ("Strategic Stockpile"), and to manufacture and
deliver to the Strategic Stockpile, or store as vendor-managed inventory, up
to 212,000 courses of the intravenous (IV) formulation of TPOXX® ("IV TPOXX®").
Additionally, the contract includes funding from BARDA for advanced development
of IV TPOXX®, post-marketing activities for oral and IV TPOXX®, and procurement
activities. As of September 30, 2021, the contract with BARDA (as amended,
modified, or supplemented from time to time, the "19C BARDA Contract")
contemplates up to approximately $602.5 million of payments, of which
approximately $51.7 million of payments are included within the base period of
performance (five years as of the award date of September 10,
2018), approximately $239.7 million of payments are related to exercised options
and up to approximately $311.1 million of payments are currently specified as
unexercised options. The $239.7 million of payments related to exercised options
includes an option exercise on September 7, 2021 for the manufacture and
delivery of approximately $112.6 million of oral TPOXX®. BARDA may choose in its
sole discretion when, or whether, to exercise any of the unexercised options.
The period of performance for options is up to ten years from the date of entry
into the 19C BARDA Contract and such options could be exercised at any time
during the contract term, including during the base period of performance.
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The base period of performance specifies potential payments of approximately
$51.7 million for the following activities: payments of approximately $11.1
million for the delivery of approximately 35,700 courses of oral TPOXX® to the
Strategic Stockpile; payments of $8.0 million for the manufacture of 20,000
courses of final drug product of IV TPOXX® ("IV FDP"), of which $3.2 million of
payments are related to the manufacture of bulk drug substance ("IV BDS") to be
used in the manufacture of IV FDP; payments of approximately $32.0 million to
fund advanced development of IV TPOXX®; and payments of approximately $0.6
million for supportive procurement activities. As of September 30, 2021, the
Company had received or billed for $11.1 million for the successful delivery of
approximately 35,700 courses of oral TPOXX® to the Strategic Stockpile, $3.2
million for the manufacture of IV BDS and $11.8 million for other base period
activities. IV BDS is expected to be used for the manufacture of 20,000 courses
of IV FDP. The $3.2 million received for the completed manufacture of IV BDS has
been recorded as deferred revenue as of September 30, 2021 and December 31,
2020; such amount is expected to be recognized as revenue when IV TPOXX®
containing such IV BDS is delivered to the Strategic Stockpile or placed in
vendor-managed inventory.
The options that have been exercised to date provide for payments up to
approximately $239.7 million. There are exercised options for the following
activities: payments up to $11.2 million for the procurement of raw materials to
be used in the manufacture of at least 363,070 courses of oral TPOXX®; payments
up to $213.9 million for the delivery of up to 726,140 courses of oral TPOXX®;
and payments of up to $14.6 million for funding of post-marketing activities for
oral TPOXX®. As of September 30, 2021, the Company has received the following
payments in connection with exercised options: $112.5 million was received in
connection with the deliveries made in 2020 of courses of oral TPOXX®; and
$7.1 million has been received or billed for in connection with post-marketing
activities for oral TPOXX®. On October 20, 2021, approximately $33 million of
oral TPOXX® was delivered to the Strategic Stockpile.
Unexercised options specify potential payments up to approximately $311.1
million in total (if all such options are exercised). There are options for the
following activities: payments of up to $225.1 million for the delivery of oral
TPOXX® to the Strategic Stockpile; payments of up to $76.8 million for the
manufacture of courses of IV FDP, of which up to $30.7 million of payments would
be paid upon the manufacture of IV BDS to be used in the manufacture of IV FDP;
payments of up to approximately $3.6 million to fund post-marketing activities
for IV TPOXX®; and payments of up to approximately $5.6 million for supportive
procurement activities.
The options related to IV TPOXX® are divided into two primary manufacturing
steps. There are options related to the manufacture of bulk drug substance ("IV
BDS Options"), and there are corresponding options (for the same number of IV
courses) for the manufacture of final drug product ("IV FDP Options"). BARDA may
choose to exercise any, all, or none of these options in its sole discretion.
The 19C BARDA Contract includes: three separate IV BDS Options, each providing
for the bulk drug substance equivalent of 64,000 courses of IV TPOXX®; and three
separate IV FDP Options, each providing for 64,000 courses of final drug product
of IV TPOXX®. BARDA has the sole discretion as to whether to simultaneously
exercise IV BDS Options and IV FDP Options, or whether to exercise options at
different points in time (or alternatively, to only exercise the IV BDS Option
but not the IV FDP Option). If BARDA decides to only exercise IV BDS Options,
then the Company would receive payments up to $30.7 million; alternatively, if
BARDA decides to exercise both IV BDS Options and IV FDP Options, then the
Company would receive payments up to $76.8 million. For each set of options
relating to a specific group of courses (for instance, the IV BDS and IV FDP
options that reference the same 64,000 courses), BARDA has the option to
independently purchase IV BDS or IV FDP. The Company estimates that sales of the
IV formulation under this contract (under current terms), assuming the IV FDP
Options were exercised, would have a gross margin (sales less cost of sales, as
a percentage of sales) that is less than 40%.
Under the terms of this contract, exercise of procurement options is at the sole
discretion of BARDA. The request for proposal that preceded the award of the 19C
BARDA Contract indicated that the expected purpose of the contract was to
maintain the level of smallpox antiviral preparedness in the Strategic
Stockpile. Based on prior product delivery activity, and current FDA-approved
shelf life of oral TPOXX®, the Company estimates that approximately one million
courses of smallpox antiviral treatment would need to be delivered to the U.S.
Government between 2021 and 2023 in order to maintain stockpile levels of
unexpired smallpox antiviral treatment during this period.
2011 BARDA Contract
On May 13, 2011, the Company signed a contract with BARDA pursuant to which
BARDA agreed to buy from the Company 1.7 million courses of oral TPOXX®.
Additionally, the Company agreed to contribute to BARDA 300,000 courses at no
additional cost to BARDA.
The 2011 BARDA Contract specifies approximately $508.4 million of payments, of
which, as of September 30, 2021, $459.8 million has been received by the Company
for the manufacture and delivery of 1.7 million courses of oral TPOXX® and
$45.8 million has been received for certain reimbursements in connection with
development and supportive activities. Approximately $2.8 million remains
eligible to be received in the future for reimbursements of development and
supportive activities.
The 2011 BARDA Contract expires in December 2024.
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International Procurement Contracts
Contract with Public Health Agency of Canada
On January 13, 2021, the Public Health Agency of Canada ("PHAC") awarded a
contract to Meridian Medical Technologies, Inc. ("Meridian," a Pfizer Company)
(the "Contract") for the purchase of up to approximately $33 million of oral
TPOXX® (tecovirimat) within five years. The Contract specifies firm commitments
for the cumulative purchase of approximately $17 million of oral TPOXX® by March
31, 2023; the remaining courses under the Contract are targeted for delivery
after March 31, 2023 and are subject to option exercise by PHAC. As of September
30, 2021, $10.3 million of oral TPOXX® courses have been delivered to and
accepted by PHAC. Such courses were delivered in the first six months of 2021.
The contract award was coordinated between SIGA and Meridian under
an international promotion agreement (as amended, the "International Promotion
Agreement") that was entered into by the parties on June 3, 2019. As
such, Meridian is the PHAC's counterparty under the Contract, and SIGA is
responsible for manufacture and delivery of any oral TPOXX® purchased
thereunder.
Canadian Military Contract
On April 3, 2020, the Company announced that the Canadian Department of National
Defence ("CDND") awarded a contract (the "Canadian Military Contract") to
Meridian, pursuant to which the CDND will purchase up to approximately $14
million of oral TPOXX® over four years. In the second quarter 2020, CDND
purchased $2.3 million of oral TPOXX®. In the third quarter of 2021, CDND
purchased another $2.3 million of oral TPOXX® courses. The remaining purchases
are at the option of the CDND and are expected to primarily occur after
regulatory approval of oral TPOXX® in Canada.
International Promotion Agreement
Under the terms of the International Promotion Agreement, Meridian was granted
exclusive rights to market, advertise, promote, offer for sale, or sell oral
TPOXX® in a field of use specified in the International Promotion Agreement in
all geographic regions except for the United States (the "Territory"), and
Meridian has agreed not to commercialize any competing product, as defined in
the International Promotion Agreement, in the specified field of use in the
Territory. SIGA retains ownership, intellectual property, distribution and
supply rights and regulatory responsibilities in connection with TPOXX®, and, in
the United States market, also retains sales and marketing rights with respect
to oral TPOXX®. SIGA's consent is required for the entry into any sales
arrangement pursuant to the International Promotion Agreement.
The fee Meridian retains pursuant to the International Promotion Agreement is a
specified percentage of the collected proceeds of sales of oral TPOXX® net of
certain expenses, for years in which customer invoiced amounts net of such
expenses are less than or equal to a specified threshold, and a higher specified
percentage of such collected net proceeds for years in which such net invoiced
amounts exceed the specified threshold. Taking into account Meridian's fee and
manufacturing costs of oral TPOXX®, it is currently estimated by the Company
that international sales of oral TPOXX® will have a contribution margin (as
expressed as a percentage of product sales, and before any consideration of
expenses not directly related to manufacturing or Meridian activities) of
between approximately 65% and 80%.
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TPOXX Regulatory Summary
On July 13, 2018, the FDA approved oral TPOXX® for the treatment of smallpox.
For IV TPOXX®, SIGA filed a new drug application ("NDA") with the FDA for IV
TPOXX® on April 30, 2021. Based on its review of the NDA, the FDA will decide
whether to approve IV TPOXX® and whether to impose any marketing restrictions or
require additional post-approval clinical studies. The Company is targeting the
first quarter of 2022 for completion of this review process. There can be no
assurance that any approval will be granted on a timely basis, if at all.
The Company is also seeking regulatory approval of oral TPOXX® in Europe and
Canada. In July 2020, the Company filed a Marketing Authorisation Application
("MAA") with the European Medicines Agency ("EMA") for oral tecovirimat, the
same formulation that was approved by the FDA in July 2018 under the name
TPOXX®. The MAA was filed under the centralized application process, which,
upon approval, will enable sales and marketing of oral tecovirimat in all
European Union member states, as well as Norway, Iceland, and Liechtenstein.
SIGA has filed its application for oral tecovirimat seeking a broader label
indication covering the treatment of smallpox, monkeypox, cowpox, and
complications from Vaccinia infection. In December 2020, the Company filed an
application for marketing authorization in Canada for oral tecovirimat. Based on
a typical regulatory review timeline, SIGA currently estimates that the review
processes for oral TPOXX® in both Europe and Canada will be completed by the
first quarter of 2022. There can be no assurance that any approval will be
granted on a timely basis, if at all.
Critical Accounting Estimates
The methods, estimates and judgments we use in applying our accounting policies
have a significant impact on the results we report in our condensed consolidated
financial statements, which we discuss under the heading "Results of Operations"
following this section of our Management's Discussion and Analysis of Financial
Condition and Results of Operations. Some of our accounting policies require us
to make difficult and subjective judgments, often as a result of the need to
make estimates of matters that are inherently uncertain. Information regarding
our critical accounting policies and estimates appears in Item 7, Management's
Discussion and Analysis of Financial Condition and Results of Operations of our
2020 Form 10-K. Our most critical accounting estimates include revenue
recognition over time, the valuation of stock-based awards including options and
warrants granted or issued by the Company and income taxes.
Results of Operations
Three Months Ended September 30, 2021 and 2020
For the three months ended September 30, 2021, revenues from product sales and
supportive services were $2.3 million, which primarily relate to the acceptance
of courses of oral TPOXX® delivered to CDND. For the three months ended
September 30, 2020, revenues from product sales and supportive services were
$41.8 million, which primarily relate to the delivery and acceptance of courses
of oral TPOXX® delivered under the 19C BARDA Contract.
Revenues from research and development activities for the three months ended
September 30, 2021 and 2020, were $2.5 million and $2.5 million, respectively.
An increase of $1.1 million of revenue in connection with the PEP Label
Expansion R&D Contract was offset by a decrease of $1.1 million in revenue
associated with the development of IV TPOXX®.
Cost of sales and supportive services for the three months ended September 30,
2021 and 2020 were $0.1 million and $5.6 million, respectively. Such costs in
2021 were primarily associated with the manufacture and delivery of courses of
oral TPOXX® to CDND. Such costs in 2020 were mostly associated with the
manufacture and delivery of courses of oral TPOXX® under the 19C BARDA Contract.
Selling, general and administrative ("SG&A") expenses for the three months ended
September 30, 2021 and 2020 were $4.3 million and $3.6 million, respectively.
The increase of approximately $0.7 million or 21% primarily reflects promotion
fees paid in connection with courses delivered to PHAC in April 2021, as well as
an increase in certain insurance, consulting, and professional service costs.
Research and development ("R&D") expenses for the three months ended September
30, 2021 and 2020 were $3.2 million and $2.1 million, respectively, reflecting
an increase of approximately $1.1 million, or 56%. The increase is primarily
attributable to an increase in direct vendor-related expenses incurred under the
PEP Label Expansion R&D Contract and the performance of post-marketing
regulatory activities for oral TPOXX®.
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Patent expenses were $0.2 million and $0.2 million for the three months ended
September 30, 2021 and 2020, respectively. These expenses reflect our ongoing
efforts to protect our lead drug candidates in various geographic territories.
Changes in the fair value of the liability-classified warrant to acquire common
stock were recorded within the statement of operations. For the three months
ended September 30, 2021, we recorded a loss of approximately $1.1 million,
reflecting an increase in the fair value of the liability-classified warrant
primarily due to the increase in our stock price. For the three months
ended September 30, 2020, we recorded a loss of approximately $1.3 million,
reflecting an increase in the fair value of the liability-classified warrant
primarily due to the increase in our stock price.
For the three months ended September 30, 2021 and 2020, we incurred pre-tax
(loss)/income of ($4.0) million and $31.6 million, respectively, and a
corresponding income tax benefit/(provision) of $0.9 million and ($7.5) million,
respectively. The effective tax rates during the three months ended September
30, 2021 and 2020 were 21.9% and 23.6%, respectively. Our effective tax rate for
the three months ended September 30, 2021 differs from the statutory rate
primarily as a result of state taxes, non-deductible executive compensation
under Internal Revenue Code Section 162(m) and a non-taxable adjustment for the
fair market value of the Warrant.
Nine Months Ended September 30, 2021 and 2020
For the nine months ended September 30, 2021 and 2020, revenues from product
sales and supportive services were $12.8 million and $80.5 million,
respectively. Such revenues in 2021 primarily relate to the delivery and
acceptance of courses of oral TPOXX® delivered to PHAC and CDND. Such revenues
in 2020 include $77.7 million of revenue related to the delivery and acceptance
of courses of oral TPOXX® under the 19C BARDA Contract and $2.3 million of
revenue related to the delivery and acceptance of courses of oral TPOXX® to the
CDND.
Revenues from research and development activities for the nine months ended
September 30, 2021 and 2020, were $5.5 million and $6.7 million, respectively.
The decrease in revenue of approximately $1.2 million, or 17%, primarily
reflects a decrease in revenue in connection with a decrease in direct
vendor-related costs for IV TPOXX® and post-marketing regulatory activities for
oral TPOXX®, partially offset by higher revenues associated with the PEP Label
Expansion R&D Contract.
Cost of sales and supportive services for the nine months ended September 30,
2021 and 2020 were $1.3 million and $10.5 million, respectively. Such costs in
2021 were associated with the manufacture and delivery of courses of oral TPOXX®
to PHAC and CDND as well as an inventory-related loss of $0.5 million. Such
costs in 2020 were mostly associated with the delivery and acceptance of courses
of oral TPOXX® to the U.S. government.
SG&A expenses for the nine months ended September 30, 2021 and 2020 were $13.6
million and $10.6 million, respectively. The increase of approximately $3.0
million or 28% primarily reflects promotion fees paid in connection with courses
delivered to PHAC and CDND in 2021, as well as an increase in certain insurance
and consulting costs.
R&D expenses for the nine months ended September 30, 2021 and 2020 were $7.8
million and $7.9 million, respectively, reflecting a decrease of
approximately $0.1 million, or 2%. The decrease is primarily attributable to
a decrease in direct vendor-related expenses incurred under the BARDA 19C
Contract in connection with supporting the development of IV TPOXX® and the
performance of post-marketing regulatory activities for oral TPOXX®, partially
offset by higher costs associated with the PEP Label Expansion R&D Contract.
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Patent expenses were $0.5 million and $0.5 million, respectively, for the nine
months ended September 30, 2021 and 2020. These expenses reflect our ongoing
efforts to protect our lead drug candidates in various geographic territories.
Interest expense for the nine months ended September 30, 2020 was $3.0
million. The $3.0 million of interest for the nine months ended September 30,
2020 included $0.9 million of accretion of unamortized costs and fees (prior
to repayment of the Term Loan). There was no interest expense recognized for
the nine months ended September 30, 2021 as our Term Loan was paid off in March
2020.
Changes in the fair value of the liability-classified warrant to acquire common
stock were recorded within the income statement. For the nine months ended
September 30, 2021, we recorded a gain of approximately $0.3 million, reflecting
a decrease in the fair value of the liability-classified warrant primarily due
to the decrease in our stock price. For the nine months ended September 30,
2020, we recorded a loss of approximately $2.9 million, reflecting an increase
in fair value of the liability-classified warrant primarily due to the increase
in our stock price.
Other income of less than $0.1 million and $0.5 million for the nine months
ended September 30, 2021 and 2020, respectively, reflects interest income on the
Company's cash and cash equivalent balances held in restricted and unrestricted
accounts.
For the nine months ended September 30, 2021 and 2020, we incurred pre-tax
(loss)/income of ($4.6) million and $47.3 million, respectively, and a
corresponding income tax benefit/(provision) of $0.8 million and ($11.1)
million, respectively. The effective tax rates during the nine months ended
September 30, 2021 and 2020 were 17.7% and 23.4%, respectively. Our effective
tax rate for the nine months ended September 30, 2021 differs from the statutory
rate primarily as a result of state taxes, non-deductible executive compensation
under Internal Revenue Code Section 162(m) and a non-taxable adjustment for the
fair market value of the Warrant. The effective tax rate also includes a
discrete income tax provision of $0.2 million primarily related to the
expiration of stock options.
Liquidity and Capital Resources
As of September 30, 2021, we had $92.8 million in cash and cash equivalents
compared with $117.9 million at December 31, 2020.
Operating Activities
We prepare our condensed consolidated statement of cash flows using the indirect
method. Under this method, we reconcile net income/(loss) to cash flows from
operating activities by adjusting net income/(loss) for those items that impact
net income/(loss) but may not result in actual cash receipts or payments during
the period. These reconciling items include but are not limited to stock-based
compensation, loss on the extinguishment of the Term Loan, deferred income
taxes, non-cash interest expense and changes in the fair value of our warrant
liability, inventory write offs, gains and losses from various transactions and
changes in the condensed consolidated balance sheet for working capital from the
beginning to the end of the period.
Net cash (used in)/provided by operating activities for the nine months ended
September 30, 2021 and 2020 was ($4.6) million and $25.6 million, respectively.
For the nine months ended September 30, 2021, net cash usage relates to support
of ordinary working capital (accounts receivable, accounts payable, inventory,
and prepaids, among other items) and customary operating activity, partially
offset by the receipt of cash from international sales. For the nine months
ended September 30, 2020, net cash provided relates to the receipt of
approximately $33 million from BARDA for product delivery, partially offset by
cash usage related to support of ordinary working capital and customary
operating activity.
Investing Activities
For the nine months ended September 30, 2021 and 2020, we used cash in the
amounts of $24,424 and $15,501, respectively, for capital expenditures.
Financing Activities
Net cash used in financing activities for the nine months ended September 30,
2021 was $20.4 million, which was substantially all attributable to our
repurchase of approximately 3.0 million shares of common stock. Net cash used by
financing activities for the nine months ended September 30, 2020 was
$107.9 million, which was attributable to our voluntary prepayment of the Term
Loan, of which approximately $85.9 million was recorded as a financing activity,
and our repurchase of approximately 3.7 million shares of common stock for
approximately $21.8 million.
Future Cash Requirements
As of September 30, 2021, we had outstanding purchase orders associated with
manufacturing obligations in the aggregate amount of approximately $4.9 million.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements.
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Recently Issued Accounting Standards
For discussion regarding the impact of accounting standards that were recently
adopted on the Company's condensed consolidated financial statements, see Note
2 , Summary of Significant Accounting Policies, of Notes to Condensed
Consolidated Financial Statements.
Safe Harbor Statement
Certain statements in this Quarterly Report on Form 10-Q, including certain
statements contained in the foregoing "Management's Discussion and Analysis of
Financial Condition and Results of Operations," constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Exchange Act, including statements relating to
the progress of SIGA's development programs and timelines for bringing products
to market, delivering products to the U.S. Strategic National Stockpile and the
enforceability of the 2011 BARDA Contract and the 19C BARDA Contract (each as
defined previously, and collectively, the "BARDA Contracts") with BARDA. The
words or phrases "can be," "expects," "may affect," "may depend," "believes,"
"estimate," "project" and similar words and phrases are intended to identify
such forward-looking statements. Such forward-looking statements are subject to
various known and unknown risks and uncertainties and any forward-looking
information provided herein is not a guarantee of future performance. SIGA's
actual results could differ materially from those anticipated by such
forward-looking statements due to a number of factors, some of which are beyond
SIGA's control, including, but not limited to, (i) the risk that BARDA elects,
in its sole discretion as permitted under the BARDA Contracts, not to exercise
all, or any, of the remaining unexercised options under those contracts, (ii)
the risk that SIGA may not complete performance under the BARDA Contracts on
schedule or in accordance with contractual terms, (iii) the risk that the BARDA
Contracts are modified or canceled at the request or requirement of the U.S.
government, (iv) the risk that the nascent international biodefense market does
not develop to a degree that allows SIGA to successfully market TPOXX®
internationally, (v) the risk that potential products, including potential
alternative uses or formulations of TPOXX® that appear promising to SIGA or its
collaborators, cannot be shown to be efficacious or safe in subsequent
pre-clinical or clinical trials, (vi) the risk that SIGA or its collaborators
will not obtain appropriate or necessary governmental approvals to market these
or other potential products or uses, (vii) the risk that SIGA may not be able to
secure or enforce sufficient legal rights in its products, including
intellectual property protection, (viii) the risk that any challenge to SIGA's
patent and other property rights, if adversely determined, could affect SIGA's
business and, even if determined favorably, could be costly, (ix) the risk that
regulatory requirements applicable to SIGA's products may result in the need for
further or additional testing or documentation that will delay or prevent
seeking or obtaining needed approvals to market these products, (x) the risk
that the volatile and competitive nature of the biotechnology industry may
hamper SIGA's efforts to develop or market its products, (xi) the risk that
changes in domestic or foreign economic and market conditions may affect SIGA's
ability to advance its research or may affect its products adversely, (xii) the
effect of federal, state, and foreign regulation, including drug regulation and
international trade regulation, on SIGA's businesses, (xiii) the risk that the
COVID-19 pandemic could impact SIGA's operations by disrupting SIGA's supply
chain for the manufacture of TPOXX®, causing delays in SIGA's research and
development activities, causing delays or the re-allocation of funding in
connection with SIGA's government contracts, or diverting the attention of
government staff overseeing SIGA's government contracts and (xiv) the risk that
the U.S. or foreign governments' responses (including inaction) to national or
global economic conditions or infectious diseases such as COVID-19 are
ineffective and may affect SIGA's business adversely, as well as the risks and
uncertainties included in Item 1A "Risk Factors" of our Annual Report on Form
10-K for the year ended December 31, 2020 and SIGA's subsequent filings with the
Securities and Exchange Commission. SIGA urges investors and security holders to
read those documents free of charge at the SEC's website at http://www.sec.gov.
All such forward-looking statements are current only as of the date on which
such statements were made. SIGA does not undertake any obligation to update any
forward-looking statement to reflect events or circumstances after the date on
which any such statement is made or to reflect the occurrence of unanticipated
events.
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